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Nikkei falls for fourth session in correction phase

JIJI

Stocks lost further ground on the Tokyo Stock Exchange Monday in a correction phase to cool down recent market overheating, with the benchmark Nikkei average falling for a fourth straight session.

The Nikkei 225 plunged 300.43 points, or 1.32 percent, to close at 22,380.99. On Friday, the key market gauge had dropped 187.29 points.

The Topix ended down 16.95 points, or 0.94 percent, at 1,783.49, after sliding 12.67 points the previous trading day.

Stocks opened lower after the Dow Jones industrial average continued to fall on Friday, briefly pushing the Nikkei down more than 200 points.

Although the market’s downside was supported by buying on dips and hopes for purchases of exchange-traded funds by the Bank of Japan, stocks were unable to cut losses in any major way, due to selling to cash in gains after their recent surge, brokers said.

The key market gauges sank deeper into negative territory toward the close, reflecting the yen’s firming against the dollar, brokers said.

The market “experienced a speed correction” after the Nikkei jumped Thursday to retake 23,000 on an intraday basis for the first time in some 26 years, said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.

The Nikkei “was in a phase of consolidating its downside at 22,000 to make a further advance,” Ota said.

Akira Tanoue, senior investment strategist at Nomura Securities Co., said that the market “lacked major buying incentives like the recent robust earnings reports from (major) Japanese manufactures.”

“Although purchases of issues with strong corporate earnings have run their course, investor appetite for bargain hunting was solid,” Tanoue also said.

Falling issues far outnumbered rising ones 1,377 to 594 in the TSE’s first section, while 64 issues were unchanged.

Volume fell to 1.565 billion shares from Friday’s 1.890 billion shares.

Toray lost 3.93 percent, with investor sentiment battered by the textile producer’s announcement on Friday that it has kept its operating profit forecast for the year through next March unchanged at ¥165 billion, brokers said.

Also on the minus side were Toyo Tires & Rubber and shipping firm Nippon Yusen.

By contrast, V-Technology jumped 11.66 percent after the precision equipment maker said Friday that its operating profit for six months through September soared 45.5 percent from a year before, to ¥3.548 billion.

Other major winners included Nissin Foods Holdings and online game provider Nexon.